Diesel price hiked by Re 1 per litre

Diesel prices were on Friday hiked by Rs 1.02 per litre, the fourth increase in rates this year.

State-owned oil firms, which had been mandated in January to raise prices by up to 50 paisa per litre every month till entire losses on the fuel are wiped out, skipped raising rates in April to avoid troubles for the government during the second half of Budget session of Parliament.

The companies have made up for skipping the April revision by increasing rates by Rs 0.90 per litre, excluding local sales tax or VAT.

The increase comes to Rs 1.02 per litre in Delhi where the fuel will now cost Rs 49.69 a litre compared to Rs 48.67 previously, Indian Oil Corp, the nation's largest fuel retailer, said in a press statement.

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In Mumbai, diesel will cost Rs 1.12 more at Rs 56.04 a litre, while in Kolkata it will cost Rs 53.97 per litre from tomorrow as compared to Rs 52.91 at present.

In Chennai, the price has been raised by Rs 1.10 to Rs 52.92. Diesel prices were last hiked on March 23 when rates were raised by 45 paisa, excluding VAT.

Similar hikes had taken place in January and February, but prices were not changed in April when Parliament's Budget session was on.

The revision in April may have been avoided, possibly in view of Oil Minister M Veerappa Moily's home state of Karnataka going to Assembly polls. Congress romped back to power in the state.

Before the hike, oil firms were losing Rs 3.81 per litre on diesel and today's increase will help cut losses by 90 paisa.

While losses on diesel had declined from Rs 7.34 a litre at the beginning of the fiscal to Rs 3.80 at present, the softening in international oil prices had led to petrol prices being cut by four times - by Rs 3 per litre on May 1, Rs 1.20 on April 16, Re 1 on April 1 and Rs 2.40 on March 16.